Sam Allardyce resigned as Bolton manager after eight years at the club.
"After careful consideration and dialogue with my close family and senior officials within the football club, I will be resigning as manager of the club with immediate effect," Allardyce said.
Reports over the weekend said the former defender would quit at the end of the season and replace Stuart Pearce at Manchester City.
Bolton chairman Phil Gartside alluded to the speculation in a statement.
"He has given his reasons for wanting to leave the club at this time, which are private and we respect that privacy," Gartside said.
Last year, he threatened the British Broadcasting Corp. with legal action after a documentary alleged that Allardyce and his son Craig, a former soccer agent, were given illegal payments in transfer deals.
The 52 year old Allardyce has completely revived Bolton taking them into the Premiership and then into Europe.
He was renowned for getting the best out of temperamental players like Nicolas Anelka and resurrecting the careers of ageing starslike French World Cup winner Youri Djorkaeff and ex-Nigeria international Jay-Jay Okocha.